Many experts fear that the next wave of the recession may knock down the US economy, pushing it to the bottom. There is a 1-in-4 chance the US economy is likely to fall into a double-dip recession, according to a majority of economists surveyed by the National Association for Business Economics.
They also warn that compared to the period from February to March 2020, the likelihood of the American economy experiencing its steepest fall has increased dramatically. In addition, many NABE members point out that the economy has not yet come out of the recession that started in February. 80% of NABE survey respondents expect another downturn after the recovery.
Most economists (about 88%) are concerned about the increasing amount of US public debt, which may exceed 100% of GDP. Curiously enough, the majority of analysts approve the current Fed’s stance on monetary policy considering it appropriate since 2007.
NABE representatives who participated in the survey highly estimated the Fed's efforts to stimulate the economy. However, they were split on the topic of whether Congress has done enough to adequately address the recession. Some analysts have considered Congress's response weak and ineffective in face of a recession.
Many experts believe that the stimulus package provided by Congress was insufficient, and 11% saw it as excessive. As for the next aid package, economists expressed different opinions as well. 52% of respondents believe that the optimal package for the next fiscal measures should be at least $1.5 trillion, and 20% say it should be $1 trillion to $1.5 trillion. At the same time, 17% suppose that the fiscal package smaller than $1 trillion would be optimal.
After studying the details of the next potential stimulus package, about 60% of economists expect Congress to increase supplemental unemployment benefits, while 18% were against the extension of the additional unemployment pay.
More than half of respondents (60%) think that the Federal Reserve will keep its key rate at 0-0.25% or slash it by the end of 2021. A number of experts assume that the regulator will raise the target interest rate by the end of 2022 while keeping it within 100 basis points (bps) of the current level.
Having summed up the survey's results, the economists stressed the priorities of the US government. Experts believe that the US authorities should do their best to curb the COVID-19 pandemic, as well as use every tool at their disposal to stimulate the economy and improve health care.
